Interestingly, published in 2007, the research in this work is before the US crisis which developed in late 2007 and has continued through 2008 (as of this review -- it still remains to be seen whether similar crisis will develop in other countries or regions globally). The reader may develop many insights about the many debates and points of view as to what may have caused the current US crisis and what may solve it.
For example, page 19 discusses the 1930's where markets were seen as the problem and government the solution. Currently (reminder, published 2007) the perception is that there is moral hazard in the system caused by government guarantees which cause crisis and market forces are the solution (a reversal of the 1930's). This is evident, for example, by the philosophy which established the Glass-Steagall Act of 1933 as a result of banking problems (p5); and the repeal of that act and replacement by the Gramm-Leach-Bliley Act of 1999 which eliminated the segregation of investment banking (manufacture and sale of stocks, etc) from traditional commercial banking (p190). A theme the authors develop is that the development of financial regulation is more a matter of trial and error than development and application of formal theory, a major reason they wrote the book (pp 19, 24).
Chapter 1 is a historical review of various crisis that have occurred and the cyclical nature of their ebb and flow, a discussion of banking crisis and currency crisis (twin crisis when they occur together), and the close relationship between banking crisis and stock market crashes. A very good historical and crisis primer.
After this, the development of mathematically expressed models makes for heavy reading (even for one with a BS cum laude Physics). Not a book that will give deep insight through word descriptions, this is one more appropriate to graduate students in economics who are interested in further developing an understanding of crisis and how to model crisis. The work is a bit of a disappointment by discussing utility maximization and rational individuals (with Spock/Vulcan-like logic) through the traditional economics lens even though the masses don't seem to respond much to logic. Assumptions galore need to be made to design their rational models. However, such is the way of traditional macro economics; by the authors own words, "... economists have a well developed set of tools for studying optimal economic systems." (p153). Mobs aren't rational and those are the ones rushing financial institutions. I am still hoping for the budding economist who can put the mathematical and behavioral models together someday.
For most, these other works in contrast to this traditional, rational-economic-being, thought and approach may make for more interesting reading. Read how rationality may be irrational after all in these works -
Your Money and Your Brain: How the New Science of Neuroeconomics Can Help Make You Rich by Jason Zweig.
Predictably Irrational: The Hidden Forces That Shape Our Decisions by Dan Ariely.
And perhaps why crisis may be okay after all (Chap 6 Allen/Gale discussion)-
Pop! Why Bubbles Are Great For The Economy by Daniel Gross
Wealth Odyssey: The Essential Road Map For Your Financial Journey Where Is It You Are Really Trying To Go With Money?